Are the financials of retiring different for women and men?

Planning for retirement should be a lifelong endeavor.  Hence the reason we talk and write about it so much!  Yes, women often face unique retirement challenges for many reasons, regardless of their marital status.  Look at the list below.  Women experience 

1. Longer life expectancy (about 5 years more than men) which requires more savings.
2. Lower lifetime earnings due to wage gap and career breaks for caregiving.  Review your social security statement.  Years when one was unemployed or took an extended unpaid time off will be easy to spot.  It is not uncommon for women to make decisions to stop working, not realizing the impact on their finances later down the road.
3. Reduced Social Security benefits because of #2.
4. Higher healthcare costs over a longer retirement period.
5. Greater likelihood of widowhood and solo retirement planning.

These factors mean women typically need to save more and invest strategically to secure retirement.  What can we do to improve our ability to retire when we want and how we want?

Key retirement planning strategies for women

The good news is that women can plan for this.  And, if you are part of a couple, it is smart to make sure your partner is included in the planning .

1.  Calculate what you need to save for retirement.  A financial planner will guide you through this exercise.
2.  Save aggressively – The general rule of thumb is to save 10-15% of pretax income. Save more if starting late. To the extent you can reduce expenses…do it.  Start small.

3. Max out employer retirement matches and catch-up contributions after 50.  (See our 2025 Important Numbers for Catch Up Contributions).
4. Consider delaying Social Security to maximize monthly benefits.  There is a significant difference in the benefit amount for most working women from taking Social Security early vs. at Full Retirement Age (FRA) vs. waiting until age 70. The higher earning spouse should wait until at least FRA, if not age 70.  If they die first, the lower earning spouse’s benefit is bumped up to the full benefit amount of the higher earning spouse.
5. Invest in low-cost, diversified portfolios aligned with your risk tolerance.
6. Build emergency savings to avoid early withdrawals from retirement accounts.
7. Get long-term care insurance, especially if you are single.
8. Maintain marketable skills to protect earning potential.  Not only can you generate additional income, but it may also provide purpose and fun.
9. Consider working with a financial advisor for personalized planning.

These tactics can be implemented over time.  And while not an exhaustive list or applicable to everyone, it is a good reminder to take a hard look 👓 at where you stand financially relative to retirement.  Have a plan; make a list and execute the things you need to do.  It will help provide you with peace of mind. 

Sources:  SSA annual report on women and retirement               National Institute on Retirement Security

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Mosaic FI, LLC is a registered investment adviser. The opinions expressed herein are those of the firm and are subject to change without notice. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of Leslie Meisner and Jenifer Aronson, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes as of December 14, 2024.

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